20231018Compliance Filing 2023 Net Metering.pdf

1407 W. North Temple, Suite 330 Salt Lake City, UT 84116

October 18, 2023

VIA ELECTRONIC DELIVERY Jan Noriyuki
Commission Secretary
Idaho Public Utilities Commission 11331 W. Chinden Blvd Building 8 Suite 201A Boise, ID 83714
RE: COMPLIANCE FILING IN CASE NO. PAC-E-16-07 IN THE MATTER OF THE APPLICATION OF ROCKY MOUNTAIN POWER REQUESTING AUTHORITY TO MODIFY ELECTRIC SERVICE SCHEDULE 135 – NET METERING SERVICE

Attention: Jan Noriyuki Pursuant to Order No. 33511 in the above referenced matter Rocky Mountain Power hereby respectfully submits its 2023 Annual Net Metering report to the Idaho Public Utilities
Commission.
Informal inquiries may be directed to Mark Alder, Idaho Regulatory Manager at [phone]. Very truly yours, Joelle Steward Senior Vice President, Regulation and Customer & Community Solutions
RECEIVED
2023 OCTOBER 18, 2023 3:48PM
IDAHO PUBLIC
UTILITIES COMMISSION
1 | P a g e

ROCKY MOUNTAIN POWER’S ANNUAL CUSTOMER GENERATION REPORT OCTOBER 18, 2023 Rocky Mountain Power (the “Company”), pursuant to Order No. 33511,1 hereby provides
the 2023 Customer Generation report to the Idaho Public Utilities Commission. The report
provides: customer participation by resource type, nameplate capacity, total customer generation,
and the amount customer generators mitigated the system coincident peak. The Customer
Generation report compares the value of exported generation from customers with on-site
generation to alternative sources of power and summarizes the impacts of customers with on-site
generation to customers without on-site generation.
The Company continues to witness growth of customers installing on-site generation and
has identified quantifiable cost shifts occurring within the residential and Schedule 23 customer
classes between customers with on-site generation and standard service customers due to the
structure of the net metering and net billing programs.
CUSTOMER WITH ON-SITE GENERATION
Rocky Mountain Power, as of September 30, 2023, had 1,456 customers participating
under Electric Service Schedule No. 135 – Net Metering Service, (“Schedule 135”) and 1,190
customers on Electric Service Schedule 136 – Net Billing Service, (“Schedule 136”), with a
cumulative nameplate capacity of approximately 23.0 megawatts (“MW”). This represents a 36
percent increase in customer participation and 46 percent increase in installed capacity since the
2022 On-Site Generation report. There are 2,568 residential customers with a combined on-site
generation name-plate capacity of 21.2 MW and 78 non-residential customers with approximately
1.8 MW of combined name-plate capacity interconnected to the system. Participation in these

1 In the Matter of the Application of Rocky Mountain Power Requesting Authority to Modify Electric Service Schedule 135 – Net Metering Service, Case No. PAC-E-16-07.
2 | P a g e

programs has increased from 1,935 customers in September 2022 to 2,646 customers by September
2023. The growth in customers’ connected capacity with on-site generation is summarized by year
in the following table.
Rocky Mountain Power - Idaho Cumulative Total
Total Residential Non-Res Residential Non-Res Total
Date Customers Customers Customers Size (kW) Size (kW) Size (kW)
Dec 2015 156 133 23 646 357 1003
Sep 2016 201 177 24 952 387 1339
Sep 2017 294 269 25 1584 396 1980
Sep 2018 592 560 32 3680 550 4230
Sep 2019 1025 990 35 6656 583 7239
Sep 2020 1362 1312 50 9579 983 10562
Sep 2021 1593 1543 50 11614 963 12577
Sep 2022 1935 1881 54 14729 1046 15775
Sep 2023 2646 2568 78 21233 1756 22989

Customers with on-site generation has increased substantially in the last year with 711
customers added which accounts for 25 percent of all on-site customers on the system. In the last
5 years, the number of on-site customers has increased by nearly five-fold with almost all of the
growth occurring in solar installations. Solar-based technology makes up 98 percent of customer-
owned generation systems compared to 47 percent at the beginning of 2015. There is a current
connected capacity of 19,838 kW of solar and an additional capacity of 2,828 kW from solar and
battery systems. There is 251 kW of wind, and 72 kW mixed wind and solar, as summarized in the
following graph:
3 | P a g e

CUSTOMERS’ ON-SITE GENERATION REDUCTION TO COINCIDENT PEAK
During calendar year 2022 PacifiCorp’s system peak of 11,017 MW occurred on July 27,
2022, at hour ending 5 p.m. mountain standard time, Idaho load contributed 730 MW to that
coincident peak. On-site generation reduced Idaho’s contribution to the coincident peak by 4.2
MW, or approximately 0.57 percent. The following table summarizes customers’ on-site
generation by month and the corresponding reduction to Idaho’s contribution to the monthly
system coincident peaks:

4 | P a g e

TOTAL CUSTOMER ON-SITE GENERATION
During calendar year 2022, Rocky Mountain Power’s Idaho customers with on-site
generators produced 22.8 GWh of energy which is summarized by month by customer class in
the following table:

IMPACT ON CUSTOMERS NOT PARTICIPATING IN NET METERING
To estimate the cost shifting that occurs when customer generators are credited at the full
retail rate for energy they export to the grid, the Company compared the credit provided to net
metering customers at the retail rate against the value of the energy exported as was determined
for 2022 in the Company’s on-site generation study (“On-site Generation Study”) as part of Case
No. PAC-E-23-172. The estimated net metering cost shifting impact is summarized in the table
below:

2 See In the Matter of the Application of Rocky Mountain Power to Complete the Study Review Phase of the Study of
the Costs and Benefits of On-site Customer Generation, Case No. PAC-E-23-17, Attachment 1 – On-Site Generation Study Table 4.1 (4.46 cents/kWh in 2022).
5 | P a g e

The retail rate that was credited to residential customers for exported energy is on average about
$107 per MWh for Schedule 1 and about $123 per MWh for Schedule 36. For general service
Schedule 23 customers, who are not subject to a demand charge, exported energy was credited at
a price of about $90 per MWh. The retail price for credits provided was much higher than the value
of the energy that was exported which the Company determined to be about $45 per MWh during
2022, resulting in cost shifting from customer generators to other customers. The overall level of
cost shifting that the Company estimates occurred during 2022 was about $732 thousand.
NET METERING AND NET BILLING PROGRAMS
As shown in the previous section of this report, the current programs for customers with
on-site generation provide greater compensation for energy sent to the grid than what that energy
is actually worth. Customers with on-site generation use the system in a way that is fundamentally
different than other customers. Unlike other customers who only consume energy that is delivered
to them from the energy grid, on-site generation customers may at different times be receiving
energy from the energy grid, consuming their own generation on-site, exporting excess energy
from their on-site generation to the energy grid, or using the Company’s system as a virtual battery.
Like with any other customer, the Company allocates its costs based upon the volumes of energy
and the magnitude of demand the Company delivers to on-site generation customers. Inasmuch as
customers with on-site generation consume the energy from their own generation, the profile and
overall quantity of energy delivered to them is reduced and the allocation of costs is also
consequently reduced. The concept of net energy is a billing construct that is used for customers
with on-site generation. Net energy does not reflect these customer’s physical time-based
relationship with the energy grid. Even though a customer with on-site generation may produce as
much total energy as that customer consumes over a period of time, in real time that customer still
6 | P a g e

relies upon the Company’s energy grid to import and export energy, provide voltage support, and
act as a virtual battery to store energy for the customer to use later.
Currently the Net Metering and Net Billing programs compensates customers with on-site
generation that export energy back onto the grid at the full retail energy rate. For smaller customers
such as residential and Schedule 23 customers, most of the fixed costs to pay for and maintain the
Company’s system are recovered through these volumetric energy charges. On average, the cost
of service for a residential customer is $97.32 per month, $22.84 or about 23 percent of this value
is energy related. The remaining $74.48 or about 77 percent is fixed and not energy related.3
VALUE OF EXPORTED ENERGY
The value of exported energy from customer on-site generators is not equal to the retail
energy rate. In the On-site Generation Study, the Company estimated that the value of exported
energy during 2022 was $44.6 per MWh.4 Providing customer generators with credits for their
exported energy at a price that reflects the fair value instead of a net energy credit that is priced at
the retail energy rate, which includes fixed costs that are not avoidable with customer generation,
is just, reasonable, in the public interest, and ensures that, over time, customer generators are paid
fairly for the value that they provide.
COMMISSION ORDERS
On August 26, 2020, Commission Order No. 34753 approved a two-phase approach used
to process the Company’s application. This approach is designed to solicit and incorporate public
feedback at pertinent stages and ensure a reasonably comprehensive study of the issues is
conducted in a credible and fair manner. The order included Attachment A, a list of items to study
as the parties evaluate what the value of customer generated export energy should be.

3 Exhibit No. 1 from Application for Authority to Implement the Residential Rate Modernization Plan. 4 Table 4.1 of the Company’s On-site Generation Study.
7 | P a g e

On October 2, 2020, Commission Order No. 347985 closed Electric Service Schedule No.
135 – Net Metering Service to new customer participation and authorized implementation of
Electric Service Schedule No. 136 – Net Billing Service effective November 1, 2020, for
customers interested in installing onsite generation. The Company issued a press release
summarizing the Commission’s order and sent letters to current Schedule 135 participants
notifying them that they are grandfathered on Schedule 135 for twenty-five years. Bill messages
were included on all customer bills notifying them of the closure of Schedule 135 to new
participation, grandfathering of existing customers, implementation of Schedule 136 – Net Billing
Service on November 1, 2020, directing customers to the Company’s website for more information
about the changes and ongoing updates.
On June 29, 2023, the Company submitted an application requesting Idaho commission
acknowledgement of its On-site Generation Study which evaluates the methods, inputs, and
assumptions for valuing on-site generation that is exported to the grid in Case No. PAC-E-23-17.6
When the Company filed the On-site Generation Study application, it notified customers of the
study and their opportunity to comment on the study through both a press release and bill insert.
CONCLUSION
The Company continues to experience growth of customers installing on-site generation,
has identified quantifiable cost shifts occurring between residential and Schedule 23 net metering
customers and standard service customers. The Company is committed to working with interested
parties to develop an export credit rate that is fair for all customers.

5 In the matter of the Application of Rocky Mountain Power to close the Net Metering Program to New Service &
Implement a Net Billing Program to Compensate Customer Generators for Exported Generation. Case No. PAC-E-19-08.
6 In the Matter of the Application of Rocky Mountain Power to Complete the Study Review Phase of the Study of the Costs and Benefits of On-site Customer Generation, Case No. PAC-E-23-17.